Coty withdraws $US10.7bn offer for Avon

Coty said on Monday that it was abandoning its pursuit of Avon Products, citing Avon’s “unwillingness to engage in discussions."

On Thursday, Coty, which had been making overtures to the rival beauty products company since last year, raised its unsolicited offer to $US10.7 billion. That was up from an offer of $US10 billion made in March and disclosed on April 2 that was rebuffed. But Coty also set a deadline of Monday for Avon to enter into negotiations.

On Sunday, Avon said that it would review the revised offer and respond within a week. That apparently wasn’t enough for Coty.

In a letter on Monday to Avon’s board, Bart Becht, the chairman of Coty, wrote: “Your total lack of engagement with us leads us to believe that you remain reluctant to explore a friendly, negotiated combination on a reasonable timetable. Two months is enough."

“It is time for Coty Inc. to move on and pursue other opportunities," he added.

Avon, whose earnings have sagged in recent years, hopes to plot a turnaround under its new chief executive, Sherilyn McCoy, formerly a vice chairman of Johnson & Johnson. On Monday, a day after the company said it would review the Coty offer, its stock rose 3.8 per cent, to $US20.96 — below Coty’s offer of $US24.75 a share

For its sweetened bid, Coty had also enlisted financing help from
Warren Buffett
‘s Berkshire Hathaway and from its German parent company, Joh. Benckiser.

Coty has been on a buying spree of late, acquiring Philosophy, a personal care product line, and TJoy, a Chinese skin care company in the last year.